The Fed Was Supposed to Move the Market–It Didn’t But the Dow Hit a New High

By Ben Levisohn

Can anything move this market? We’re not talking individual stocks here, mind you, ’cause plenty, like Pitney Bowes (PBI), Energizer (ENR) and Dun & Bradstreet (DNB), were flying, while gains in 3M (MMM) and Goldman Sachs (GS) helped the Dow Jones Industrial Average hit a new high for the first time this year.

REUTERS

No. We’re talking the major indexes, and they went virtually nowhere today, despite plenty of what should have been market-moving news.

Nope. The Fed released its statement at 2pm, and while the S&P 500 bounced around a bit in a tight range, it finished up just 0.3% at 1,885.20. The Dow Jones Industrial Average, meanwhile, gained 0.3% to 16,580.84, a record high and the first of the year. The Nasdaq Composite rose 0.3% to 4,114.56, while the small-cap Russell 2000 was the day’s big winner–it rose 0.5% to 1,126.86.

Here’s a chart of the SPDR S&P 500ETF (SPY) today, just so you can how little happened. Remember, the range from low to high is just 0.7% (and click for a larger image):

Was it something the Fed said? Actually, it was what the Fed didn’t say, which wasn’t much of anything. The Lindsey Group’s Peter Boockvarexplains:

After acknowledging the improvement in the economy in the last few months off the very disruptive weather influenced Q1, the FOMC statement was almost identical to the one given in March. This should have been as expected as at this point in the well telegraphed taper (half way done) and with forward guidance already having been altered to the now vague benchmark, there was not much for the Fed to add except to say policy as they’ve laid out remains on track until the data tells them otherwise. The Fed understands the risks involved with a removal of accommodation and I believe in their eyes, boring is good right now. How long the market views boring however will soon be seen as we will now cross the threshold of being half way done with QE at the next meeting. They’ve now reduced it by a $480b annualized run rate, headed to $600b at the next meeting. I repeat my belief that tapering is tightening just as QE was a massive form of easing.

Maybe Friday’s payroll report can get the market moving.

As for those aforementioned stocks, Dun & Bradstreet jumped 6.9% to 110.76 after acquiringIndicee Inc., while Pitney Bowes climbed 6.9% to $26.80 after it beat the Street consensus and reaffirmed its guidance. Energizer surged 14% to $11.69 after it said it would split itself in two. Today’s biggest Dow winners–Goldman Sachs and 3M–were also it’s largest point contributors. Goldman Sachs gained 1% to $159.82, contributing 10.15 points to the Dow’s gain, while 3M rose 1.2% to $139.09, contributing 9.89 points.

About Stocks To Watch

Earnings reports, corporate strategies and analyst insights are all part of what moves stocks, and they’re all covered by the Stocks to Watch blog. We also look at macro issues, investor sentiments and hidden trends that are affecting the market. Stocks to Watch gives you the full picture of the U.S. stock markets, all day long.

The blog is written by Ben Levisohn, a former stock trader who has covered financial markets for the Wall Street Journal, Bloomberg and BusinessWeek.